JPMorgan cuts back on US silver futures

JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal.

The decision by JPMorgan was an attempt to deflect public criticism of the bankâs dealings in silver, a person familiar with the matter said. The person added that the bankâs position in silver would from now on be âmaterially smallerâ than in the past.

A group of small precious metals investors has alleged that large short positions â or bets on lower prices â in silver futures held by several banks, including JPMorgan, are keeping prices artificially low.

The US regulator, the Commodity Futures Trading Commission, announced in September 2008 that it was investigating complaints of misconduct in the silver market, although it did not name specific entities.

However, JPMorgan said in a statement: âIt is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.â The bank declined to comment on whether it had reduced its position in the silver market.

The price of silver has risen more than 70 per cent since mid-August to hit a 30-year high of $30.68 a troy ounce last week on the back of a surge in investor buying and a rebound in industrial silver consumption.

In two previous reviews of the silver market, the CFTC has dismissed claims of manipulation. Most analysts say there is little reason to believe the price of silver is being systematically manipulated.

But Bart Chilton, a CFTC commissioner, said in October that he believed there had been âfraudulent effortsâ to âdeviously controlâ the silver price. He did not name any party.

Publicly available data on individual tradersâ positions are sketchy. In a speech last Wednesday, Mr Chilton said that âearlier this year, one trader held more than 40 per cent of the silver marketâ. He declined to identify the trader.

The CFTCâs Bank Participation Report shows that one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.

In the latest example that virtually every conspiracy theory is almost always inevitably proven to be fact, the Financial Times reports that JP Morgan, the firm targeted by thousands of "tin foil hat" wearing, conspiratorially-oriented "gold bugs", has cut back on its US silver futures. "JPMorgan has quietly reduced a large position in the US silver futures market which had been at the centre of a controversy about its impact on global prices for the precious metal." And in what can only be considered an unprecedented victory for all those who have over the past year agitated to putting JP Morgan out of business, most recently spearheded by the likes of Mike Krieger and Max Keiser, by forcing a massive short squeeze on its commodities trading desk, we learn that "the decision by JPMorgan was an attempt to deflect public criticism of the bankâs dealings in silver, a person familiar with the matter said. The person added that the bankâs position in silver would from now on be âmaterially smallerâ than in the past." Of course, the latter is pure and total bullshit: as Bart Chilton indicated over the weekend, it is JP Morgan who at one point or another (and possibly very recently) controlled as much as 40% of the silver market, via a massive short. Attempting to make others believe that this short could be covered without pushing the price of the silver metal to over $100/ounce is an indication of either how stupid JPM believes the general population to be, or just how desperate the firm is to end the ongoing short squeeze onslaught. Either way, we are confident that this first unprecedented confirmation that a) JPM is indeed massively short silver and b) that it is hurting bad, will merely redouble efforts to put the world's biggest financial company out of business.

Quote from ASusilovic:----JPMorgan has quietly reduced a large position in the US silver futures market....
----The price of silver has risen more than 70% since mid-August to hit a 30-year high....
----Strong buy

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It must be the "final top" now. JPM is the "final fool" to cover it's position at the worst possible time. :eek:

I agree that this is old news now.
On Dec 6th, Bullish Review (which tracks the CFTC report on open interest), reported that both long and short commercials had liquidated their positions (Nov 30th reporting.) At that point Commericals were holding normal, non-speculative levels, with large speculators and small speculators having insignificant net positions. Since then, there has been some minor movement (Dec 7th), but the Commercial interest play is definitely over.